IndustryManagementNews In Brief

Industry demands permanent rate drop for Auckland accom

In April, Auckland’s commercial accommodation providers were relieved by a council decision to suspend the controversial Accommodation Provider Targeted Rate (APTR) for the period of one year.

Now on behalf of the accommodation sector, leading tourism industry bodies are calling for Auckland Council to permanently drop the APTR.

Due to the impacts of the COVID-19 pandemic Auckland Council’s Emergency Committee agreed to suspend APTR from 1 April 2020 until 31 March 2021. Originally introduced in 2017 the APTR funds approximately half of the tourism and event activity of Auckland Tourism, Events and Economic Development (ATEED). Seen as unfair to Accom providers, industry bodies have continued to call for alternate solutions to the APTR for funding of the council.

Tourism Industry Aotearoa (TIA) alongside the New Zealand Hotel Owners Association NZHOA are demanding that Auckland Council to drop the Accommodation Provider Targeted Rate altogether and both submitted concerns to the Council’s Emergency Budget 2020-21.

According to TIA its Auckland hotel members saw a decline in accommodation revenue of $75 million in March, April and May 2020 compared to the same three-month period of 2019. When combined with the loss of other revenue, such as food and beverage, conferences and events, it is clear the impact on hotels is catastrophic.

TIA Chief Executive Chris Roberts says: “Overall occupancy was down an average of 43.7percent over the same period. The only saving grace is that a number of Auckland hotels are being used for quarantine purposes.”

TIA says the Council must not reinstate the rate after the suspension which ends 31 March 2021.

The benefits of tourism are spread across the entire Auckland economy. The accommodation sector receives just 9 percent of the visitor spend in Auckland but is being required to fund 50 percent of Council marketing efforts (through Auckland Tourism, Events and Economic Development) to grow this spend,” Mr Roberts says.

Talking about the planned reintroduction of APTR in March 2021 NZHOA “strongly advocate for its indefinite removal” because of the devastating impact it will have on hotels who now face the longest road to recovery.

NZHOA has long maintained that the “APTR is both unfair and inequitable, increasing rates three fold in some cases and costing hoteliers hundreds of thousands of dollars. As a fixed operational cost based on a hotel’s capital value, the APTR can not be passed onto the guest”.

In a plea to the council Lani Hagaman Chairperson of the New Zealand Hotel Owners Association wrote: “We urge the Council to show its continued support of our sector. All regional funding models throughout New Zealand should be reviewed. Auckland Council must work with central government to determine a fairer ‘across the board’ means of raising funding for Auckland’s visitor attraction and major events spending. APTR is a rate the hotel sector can not sustain. If it is reinstated, Auckland’s hotel sector faces an even more uncertain future.”

Image Credits: ©Panumas –

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